Based in New Delhi, the full service Vistara will begin operations with a fleet of new Airbus A320-200s with 148 seats, Tata SIA Airlines Ltd said in a statement late on Thursday.

Vistara will offer flights to Mumbai and Ahmedabad initially, it said.

The announcement comes in the middle of a particularly testing week for the airlines industry in India, with budget carrier SpiceJet struggling for survival.

The Tata Group and Singapore Airlines announced the plan to launch Vistara on Sept 19, adding a deep-pocketed player to a fast-growing but competitive Indian aviation sector where most operators lose money.